im not sure that the spacing of a sram shifter (nice shifter by the way, eve though im bias against gripshift) will be compatable to your shimano rear end. by the looks of the picture, that is a 7speed shifter and you have a shimano 7speed rearend, not to mention that the shifter is probably indexed. deja vu? so i don't know if that would be a step backwards for you getting that shifter, unless you were to upgrade to a seven speed rear freewheel. and nashbar is a good place to find such items i've heard.
as far as your wanting to upgrade the derailleur on the rear, does it bolt directly onto the frame mount or does it have a built in "claw" that sits between the axle bolt and frame? for the lowerend "claw" type, i think the best yo'll find is shimano tourney. if its a better type that is built in to the frame, the sky is the limit. im partial to shimano so anything deore will do the job. deore isn't very low end, but its worth a few extra bucks.